Question

Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $153,357; beginning inventory $122,003; cost of goods sold $350,824 and sales revenue $820,884.

Calculate the inventory turnover for Oakley, Inc. (Round inventory turnover to 2 decimal places, e.g. 5.12.)

Inventory turnover =

Calculate the days in inventory for Oakley, Inc. (Round days in inventory to 0 decimal places, e.g. 125.)

Days in inventory =

Answer 1

inventory turnover = cost of goods sold / average inventory

here,

cost of goods sold = 350,824

average inventory = (beginning inventory + ending inventory)/2

=>($122,003+153,357)/2

=>$137,680.

inventory turnover = 350,824 / 137680 =>2.55 times.

second part;

days in inventory =365 days / inventory turnover ratio

=>365/2.55

=>143 days.